But economists had been looking for the rebound because of cold weather that gripped much of the nation in February. In addition, the Institute for Supply Management factory index improved in the month.

'Manufacturing is at a standstill rather than in meltdown.'
Ian Shepherdson,High Frequency Economics

Early indicators of March factory activity, reported on Thursday, have been weak: Both the New York and Philadelphia factory indexes showed very little growth. See full story.

Friday's output report eased some concern that the factory sector was in a recession.

"Manufacturing is at a standstill rather than in meltdown," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Industrial production is up 2.3% in the past 12 months

Even the drop in January wasn't as bad as first reported. Production fell 0.3% in January, revised from a 0.5% decline reported previously. Capacity was at 81.4% in January, revised up from 81.2% earlier.

Utilities hit on all cylinders

In February, utility output surged 6.7% and is up 9.6% over the past 12 months. This was the largest monthly gain in utility output since December 1989.

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